SIGA

[David Randolph]

"Siga para bingo" is a Portuguese expression that essentially means: "Go for it !"

SIGA is a speculative recommendation, and as always, we'll recommend a position not larger than 6.66% of your total equity. If you can't be this conservative, at least try not to invest more than 20% of your capital in one single stock, that would be too risky.

Anyway, I'll make a trading plan that limits risk. SIGA was down 2.81% to $4.15 in after hours trading, which bodes well for a bullish day today (after a long white marubozu a higher open can kill the short term advance phase. A lower open is perceived as early profit taking and is a good set up for another long white candle).

I was seeing the intraday action yesterday, and I remember there was somewhat of a resistance level at $4.03. Probably this level will hold the stock at today's morning trade.

We don't want to be too meticulous on this, so I say I'll buy on the $4.05 - $4.10 range (it must be in the first two hours of trading). If, by the close, the stock is set to close below $4, I'll sell it as a protective action.

This plan is to ensure that we're still buying momentum, because if we're not buying momentum, I don't want the stock.

Here's the fundamental justification for this trade:

«It took me 1 1/2 hours to read this entire thread, but it was worth it  . I wish I've read it earlier. Anyway, here's my perspective on the stock:

1) SIGA rejected $68 M when it backed off from the merger with PharmAthene. The only reason to do this is because management thinks the company is worth a lot more.
2) Current market cap is $135 M.
3) The government is supporting SIGA's research and tests with money.
4) The SIGA-246 test on monkeys was 100% successful and without side effects.
5) The government plans to acquire $1.9 B of smallpox related drugs. SIGA is the leading treatment.
6) There was a private placement, but it wasn't big, just $9 M, and it was bought by hedge funds at $4.54.
7) Technical analysis is very bullish, with the stock coming back after a period of consolidation
There's an element of emotion here, since smallpox shows up in every history book as the deadliest disease ever.
9) Vulnerability of 223 million Americans that were never vaccinated against smallpox

I could go on with bullish information (most of it taken out from this thread), but I think you get the point. I believe SIGA can double from current levels, reaching a market cap of $270 M, easily.  

There are risks, however. There are always risks. The company may dilute shareholders value by issuing and selling shares in the open market. The drug can be effective on monkeys, but not effective on humans. It can take a long time for the drug to be approved. SIGA doesn't have an history of financial stability or profits to be supportive if the share price starts declining.  Warren Buffet would never buy this, that's for sure.

But, you're either a speculator or you're not. As I view it, a speculator MUST buy SIGA now. It may go up 100 or 200% on speculation alone. Because there's room to dream here. You're not attached to fundamentals, you're allowed to dream.

Bulls have the ball now, and I bet they will score. If they don't, there are always protective stop losses to use.»

[Maestro]

We don't want to be too meticulous on this, so I say I'll buy on the $4.05 - $4.10 range (it must be in the first two hours of trading). If, by the close, the stock is set to close below $4, I'll sell it as a protective action.

Going into the homestretch for today. David, are you still holding?

Maestro

[David Randolph]

I don't think it will close above $4, so, according to plan, I just sold SIGA at $3.90.

The stock bounced strongly from the support level around $4, but it looks clear now it will close below it.

[Terliso]

I made 160% profit on the first run of SIGA.... I'm buying again setting a limit order for tomorrow half of the candle from yesterday.


Wish me luck!!

[David Randolph]

I made 160% profit on the first run of SIGA.... I'm buying again setting a limit order for tomorrow half of the candle from yesterday.

Wish me luck!!

Well, good luck Terliso 

I actually was quite uncomfortable holding SIGA during today's session. I should have said "sell with a 5% profit" hehe, but I didn't, and I always follow what I say when the markets are closed.

I was reading some articles about smallpox and acknowledged that the disease is extinct since 1978. Officially there are only two locations that kept the virus for studies: one lab in the US and another in Russia. The concern is that the USSR had a secret biological weapons programme and created many more locations with the variola virus, and later those virus got to rogue states and terrorist groups.

I just think that if they had it, they would have already used it, since it would be so simple and there's no limit to their evil. Government has $1.9 B for smallpox, but $700 M plus already went to Wyeth's vaccine, Dryvax. Those $1.9 B are until 2013, I don't think there will be much more.

The bullish case was getting more and more difficult to defend in my head, and when I saw the stock come back down to $4 after that 10% morning rally, I knew I would take a loss on SIGA.

It was a small 3.7% loss on 6.66% of capital, this means 0.24% of total capital. I like to take small losses and large profits, so the global result is an above average return.

[tokyopua]

I don't think it will close above $4, so, according to plan, I just sold SIGA at $3.90.

The stock bounced strongly from the support level around $4, but it looks clear now it will close below it.

I am still in but I really like this kind of nible and aggressive trading David!    In and out in one day if the stock doesnt do what you expected, plan the trade and trade the plan.

Especially now that I have an account with BoA that I can get 30 free trades per month, I wont be afraid to dump a stock just because of some meaningless psychological commission barrier either  

[Terliso]

Siga: Studies Show Smallpox Drug Is Safe
Thursday November 9, 2:41 pm ET 
Siga Pharamceuticals Says 2 Federal Studies Show Smallpox Drug Is Safe and Effective


NEW YORK (AP) -- Biotechnology company Siga Technologies Inc. said Thursday results from two independent studies of its smallpox drug show that it is safe and effective.
The trials were conducted by the National Institute of Allergy and Infectious Diseases and the U.S. Army Medical Research Institute of Infectious Diseases. They focused on primates that had high levels of monkeypox infection, which can be fatal if left untreated. In both studies, the subjects were completely protected from the disease.

The study validates a previous study, the company said, in which the drug candidate provided complete protection against human smallpox in non-human primates.

Studies have shown that the treatment drug is safe to administer to humans in a once-a-day pill form. The drug, called Siga-246, has been granted Fast-Track status by the Food and Drug Administration.

Shares of Siga rose 14 cents, or 3.8 percent, to $4.03 in afternoon trading on the Nasdaq. The stock has traded between 86 cents and $5.50 over the last 52 weeks.

[Terliso]

SIGA Announces $2.3 Million in New Contracts with the U.S. Air Force
Friday November 10, 7:30 am ET


NEW YORK--(BUSINESS WIRE)--SIGA Technologies, Inc. (NASDAQ: SIGA - News) today announced receipt of two contracts from the U.S. Air Force for a total of $2.3 million. SIGA received a one-year, $1.4 million contract with the Air Force Medical Service for the development of counter-measures against important potential biowarfare pathogens, the Dengue viruses, and other water-related viral agents. SIGA also received a one-year, $900,000 contract to aid the USAF Special Operations Command (USAFSOC) in its development of specific anti-viral agents, focusing on orthopoxvirus targets distinct from the target that is the focus of SIGA-246, the Company's lead smallpox drug.

 
"We appreciate the opportunity to continue the development of these critical biological defense capabilities with our colleagues from the Air Force," said Dr. Dennis E. Hruby, Chief Scientific Officer of SIGA.

Dengue fever and Dengue hemorrhagic fever are acute febrile mosquito-borne diseases caused by one of four closely related virus serotypes of the genus Flaviviridae. The two diseases affect tens of millions of people worldwide every year and present a biodefense threat in the U.S. Currently, there is no approved drug or vaccine against Dengue, leaving troops vulnerable overseas and in areas affected by flooding.

SIGA recently announced a breakthrough in its SIGA-246 program with the successful completion of a preliminary primate trial in which the drug completely prevented smallpox disease.

[Melf Elf]

Alister,

Did you get filled at 3.82?  Whether you did or not, you nailed that 50% retracement.  Applause.  Wednesday's and Thursday's lows were 3.81.

FWIW, SIGA is finding resistance in the 4.33-4.35 area from the "Gap To Crap" reversal candle (the 5.50 high was made very early in the day).

4.35 was the low that day.  Two days later, the "Gap To Crap" high was 4.33, then the stock subsequently sold off to 3.10.

SIGHa got through that 4.33-4.35 resistance on Wednesday and Thursday, but not by much.  4.42 and 4.48, then it sold off both days.  Today's high so far today  is the 4.35 exactly, and SIGA has sold off a bit from there again.

There's been more good news, but the stock isn't rallying much.  It's reacting to that 4.33-4.35 technical resistance, and a lot of good news already is priced into the HUGE gap up.

WARNING:

Some of you, like Alister, have enormous gains, so go ahead and have some fun with "house money," if you want to.  But, if you weren't in SIGA before the big gap, please  be careful, guys. 

As David has stressed, these stocks are VERY risky.  They can hurt you badly, especially if you double down on a losing position.   These stocks can be very exciting, but more often than not, "When the news is great, you're too late!"

Applause to David for taking a "reasonable risk" in this stock.

Good luck, everyone! 

[Melf Elf]

SIGA has been rallying on "higher highs...and higher lows."  BULLISH

Watch for signs that aren't bullish.

1. There's a "possible" H&S Top, basis the 10-minute chart.  It's got a fairly steep up sloping neckline that rises about 0.004 per 10-minute bar.  It's currently at about 4.036, as best I can calculate, so it will be at 4.04 on the next 10-minute bar.

Volume has been declining during the formation, which is consistent with a H&S Top.

Watch to see if that breaks to the downside.

2. The last lows were 3.95-3.96, which is the second data point on the neckline.  If that gets taken out, SIGA will have made a "lower high at 4.35 KEY RESISTANCE...and a lower low."

That would be a "behavior change" in the stock, from the BULLISH "higher highs...higher lows."

Just a couple of things to watch for.

[Se7en]

Great analysis Melf Elf! <applaud>

[Melf Elf]

Great analysis Melf Elf! <applaud>

Thanks, Se7en.  I'd suggest planning a stop at one of those 3 support levels.

1. The up trendline got violated by a couple of pennies.  The low was 4.02, then SIGA bounced off it, "wanting" to go higher.  If 4.02 gets taken down, I'd be inclined to sell.

2. 3.95-3.96 horizontal support

3. Alister's 3.81 horizontal support.

As exciting as this stock has been, "it's just one stock...just one trade."  If anyone has a loss, "Don't let it turn into a disaster."

Good luck, everyone!

[Melf Elf]

Sorry, I forgot to draw the trendline, and the horizontal support lines.